Saturday, January 21, 2012

Can measurement of subjective well-being help us to assess whether life is getting better?

The British government has recently taken some steps toward
measurement of subjective well-being in the hope that this will provide ‘a
general picture of whether life is improving’ and eventually ‘lead to
government policy that is more focused not just on the bottom line, but on all
those things that make life worthwhile’.

The quoted words are from David Cameron, the British prime
minister. I find it interesting that he refers to ‘the bottom line’ as though
the bottom line in British politics has always had a pound sign in front of it.
Philip Booth, editor of the recent Institute of Economic Affairs (IEA) publication
‘… and the Pursuit of Happiness’, suggests that the prime minister was
attacking a ‘straw man’; the British government has always had a multitude of
objectives.

Booth makes the point that attempts to ‘centrally direct
policy toward improving general wellbeing’ will fail just as attempts to
increase GDP growth through use of central planning also failed. I agree with
the point, but I suspect that it is also a straw man. I doubt whether David
Cameron is proposing to adopt some form of central planning in an attempt to
raise national happiness. It seems to me that attempts to obtain a better
picture of whether life is improving are no more likely to encourage central
planning than was the measurement of national income likely to encourage
central planning. Like many happiness researchers, the pioneers in the field of
national income measurement were of an interventionist frame of mind. They actually
wanted better measures of economic activity as an aid to implementation of Keynesian
macro policies. The central planners
were not slow to jump on the national income measurement bandwagon, but there
was no slippery slope leading inevitably from national income measurement to
increased government intervention.

However, I can’t claim to know what the British prime
minister has in mind. Initial survey work by the Office of National Statistics
(ONS) has focused on a comparison of different measures of subjective well-being.
Some of the results are interesting. For example, there is a fairly high level
of correlation (0.66) between responses to a standard life satisfaction
question (How satisfied are you with your life nowadays?) and a eudenomic
question (Overall, to what extent do you think the things you do in your life
are worthwhile?).

Yet, that kind of information will not tell us much
about whether life is getting better. As Paul Ormerod demonstrates in his
chapter of the IEA publication, levels of life satisfaction in high income
countries tend to fluctuate over time without any obvious trend – and despite
improvements in many different well-being indicators. I think the metaphor of a
ladder attached to a helicopter, which I used in a recent post, is helpful to
an understanding of why successive snapshots of life satisfaction cannot
measure progress. If I am climbing a ladder that is attached to a helicopter,
my height above the ground depends on the height of the helicopter as well as
on which rung of the ladder I have reached. The ladder represents the benchmark
of possibilities against which I assess my life satisfaction, but upward movement
of the helicopter (i.e. expanding possibilities) may be my main source of progress.

In my view, if you want to know whether people feel that
their lives are improving you need to provide them with an appropriate benchmark
against which to make that comparison. The ONS survey enables this by also asking
respondents to rate their life satisfaction a year ago and five years ago. The
scores for life satisfaction five years ago and one year ago were slightly lower
than those for current life satisfaction. This suggests, somewhat surprisingly,
that Brits generally feel that their lives are still improving despite the
global financial crisis and its aftermath. That kind of information seems to me
to be worth having.

Unfortunately, I couldn’t find any discussion in the IEA
publication of what measures of progress would be superior to the successive
snapshots of life satisfaction that are targeted for criticism by several of
the authors. The publication certainly serves a useful purpose in bringing
together the contributions of a range of authors who question false assertions
that have been made on the basis of happiness research and caution against government
attempts to use the findings of happiness research to introduce policies to promote
happiness. Nevertheless, I was slightly disappointed that the editor did not
show a little more sympathy for the idea that there could be some merit in the
aim of the British prime minister to obtain a better picture of whether life is
improving in that country.

I expect that if government policies were focused
more clearly at expanding the opportunities that make life worthwhile, there would actually be
less government regulation in most countries, including the UK.

Thanks for your comment, Cathy. I obviously agree. Some people are hoping to use this information to promote additional government regulation, but I doubt whether the information will help them.

As I see it, the main issues are pragmatic. Will the surveys provide the information about progress, or whatever, that the government is seeking? Do the benefits of having the information exceed the costs? (The information may be worth having to help individuals to make choices about how to live their lives even if it is not justified solely from a public policy perspective.) Is a government agency the most appropriate organization to collect the information? (There may be a case that government agencies can do the task at lower cost by extending existing surveys.)

Emancipation

Welcome!

Welcome to Freedom and Flourishing. While you are here, why not take a look around and leave some comments.

There is a list of my most popular posts below. I am pleased that a post about characteristics of a good society, that I wrote in 2009, is still one of the most popular. That post captures some of the ideas about freedom and individual human flourishing that I think are most important.